SDLP - Seadrill Partners LLC agrees to acquire the tender rig T-16
October 11 2013 - 8:54AM
London, United Kingdom,
October 11, 2013 - Seadrill Partners LLC (NYSE: SDLP)
("Seadrill Partners" or the "Company") announced today that it has
entered into an agreement to acquire the company that owns the
tender rig T-16 from Seadrill Limited ("Seadrill") for a total
purchase price of US$200 million, less approximately US$93 million
of debt outstanding under the credit facility secured by the T-16.
Seadrill Partners will acquire the company that owns the T-16 in
exchange for approximately US$107 million in unregistered common
units that Seadrill Partners will issue to Seadrill Limited. The
number of common units to be issued to Seadrill Limited will be
3,310,622, at a price of US$32.29 which is based on the ten-day
volume weighted average closing price ending on October 10, 2013
for Seadrill Partners' common units. The transaction is expected to
close within October 2013.
The T-16 commenced operations in September 2013
under a five-year contract with Chevron in Thailand at an initial
dayrate of US$115,500. The debt secured by the T-16 matures in
December 2017 and has an interest rate of LIBOR plus a margin of
3.25% per annum.
Seadrill Partners' management believes that the
acquisition will be accretive to unitholders and has recommended
that, upon completion of the acquisition, the Board of Directors of
Seadrill Partners (the "Board") consider an increase in the
quarterly cash distribution of between US$0.025 and US$0.03, an
approximate 7% increase (annualized increase of between US$0.10 and
US$0.12 from the current annualized distribution rate of US$1.67
per common unit), which would become fully effective for the
distribution with respect to the quarter ending December 31, 2013.
Any such increase would be conditioned upon, among other things,
the closing of the acquisition, the approval of such increase by
the Board and the absence of any material adverse developments that
would make such an increase inadvisable.
The Board of Directors of Seadrill Partners and
the Conflicts Committee of the Board have approved the purchase
price and issuance of the common units. The Conflicts Committee
retained a financial advisor, Global Hunter Securities, to assist
with its evaluation of the transaction.
The acquisition of the T-16 is another important
step in Seadrill Partners' growth strategy and the Board is excited
about the Company's future growth prospects.
FORWARD LOOKING
STATEMENTS
This news release includes forward looking
statements. Such statements are generally not historical in nature,
and specifically include statements about the Company's plans,
strategies, business prospects, changes and trends in its business
and the markets in which it operates. In particular, statements
regarding the Company's ability to complete the acquisition of the
T-16 and projected increases in cash distributions are considered
forward looking statements. These statements are made based upon
management's current plans, expectations, assumptions and beliefs
concerning future events impacting the Company and therefore
involve a number of risks, uncertainties and assumptions that could
cause actual results to differ materially from those expressed or
implied in the forward-looking statements, which speak only as of
the date of this news release. Important factors that could cause
actual results to differ materially from those in the forward
looking statements include, but are not limited to the performance
of the drilling rigs in the Company's fleet, delay in payment or
disputes with customers, fluctuations in the international price of
oil, changes in governmental regulations that affect the Company or
the operations of the Company's fleet, increased competition in the
offshore drilling industry, and general economic, political and
business conditions globally. Consequently, no forward looking
statement can be guaranteed. When considering these forward looking
statements, you should keep in mind the risks described from time
to time in the Company's filings with the SEC, including its Annual
Report on Form 20-F.
The Company undertakes no obligation to update any
forward looking statements to reflect events or circumstances after
the date on which such statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to
time, and it is not possible for us to predict all of these
factors. Further, the Company cannot assess the impact of each such
factor on its business or the extent to which any factor, or
combination of factors, may cause actual results to be materially
different from those contained in any forward looking
statement.
This
announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: Seadrill Partners LLC via Thomson Reuters ONE
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